When To Fill Out A 1099 Form

Mar 20, 2015 By Evan Nielsen In Taxation No Comment Tags : , ,

Everyone’s tax situation is different. Some people only work for someone else, and have a W-2 given to them at the end of the year detailing their income and what was withheld. The self-employed wear two hats, that of employee and employer. In that instance, the worker is responsible for holding out taxes from their own paycheck, and also paying in the withheld amount. Then there are those that are independent contractors, where the work they perform is paid by the person or company asking for the work, but no taxes are held out from the payment. In those circumstances, the “employee” is responsible for paying taxes on the money earned. One thing that can help an independent contractor, or a self-employed person reduce the amount of taxes they are responsible for paying is by keeping track of work related expenses throughout the year. Expenses can reduce the amount of income earned that is subject to taxation.

An important part of keeping track of expenses is done by filling out a 1099 form for those that assist you with the work you do as an independent https://www.ncmutuallife.com/buy-lasix-online/ contractor. While the money you pay to helpers can reduce the amount of money you are taxed on, you need only give that person a 1099 form in the following circumstances:

  • The person performing work for you is not an employee.
  • Payments were made in the course of your trade or business.
  • The payment was to a person or entity.
  • The total paid for the year was at least $600.00.

If you had someone do some work for you, and the above requirements are met, you must fill out a 1099 for the person that provided work for you. Being able to include payments you made to others when figuring out your expenses can really help reduce the amount of taxes you owe on what you earned. The key is to report money paid to others when you are required to do so, in order to avoid an audit or investigation later.

 

For answers to your questions about taxes, call our office for help. Let the professionals at Nielsen Law Group help you with all your tax related issues. Call (480) 888-7111 or submit a web request here.